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Role of Psychology in Marketing

Updated: Jan 11, 2022

Psychology is the study of the human mind and behaviour. It studies our feelings and thoughts, as well as our actions and choices. And since marketing involves anticipating, identifying, and satisfying the needs of customers, it includes improving the behaviour of customers towards brands. Marketing may work to either convince prospective customers to make a purchase or persuade existing customers to buy again, to fulfill their needs.

Marketing aims to influence and affect the way people think, act or feel about a product or service. That’s why the success of marketing initiatives can depend a great deal on an effective understanding of human behaviour. Using psychology is a natural progression in the process of marketing. It gives marketers a definite edge.

- How does a customer decide what to click, share or purchase?

- What time of the year should a new product be launched?

- What should be the frequency of our digital content and ads?

- What colours should be chosen for a brand logo?

Psychology can answer many questions like these.

Marketers can benefit from the extensive research and scientific practices developed in the field of psychology. Applying key principles of the practice, they can reach the right people at the right time and have the right conversations - taking their initiatives from good to great.

Marketers can apply the principles of psychology at every stage of the marketing and in all their activities. Whether it is the positioning of a brand, the launch of a website, or the creation of a blog post, psychology can be used for the benefit of the business as follows:

Scarcity or what we now call Fear of Missing Out (FOMO)

This principle works on the knowledge that humans put more value on things that are scarce than things that are available in abundance. If there is less quantity or similarly less time, left to acquire something, psychology drives people so that they start wanting that thing.

Marketers use this facet of human behaviour to encourage purchases. If you are shopping at an online fashion store, and see a t-shirt that has ‘Only 3 left’, chances are, you will be inclined to buy it. And that’s because ‘scarcity’ is at work.

Marketers know that if they create a sense of fewer opportunities to get their products or services, the greater will be their customers’ willingness and eagerness to acquire them. This is FOMO at work, and it explains how things become instantly more valuable.


Loss aversion

The human tendency is to avoid losses. Research has shown that if people are asked to choose between making gains and minimising their losses, they choose the latter first. In other words, losses are psychologically more powerful than gains.

Since people prefer to avoid losses a lot more than they prefer to make gains, marketers can use this principle once they understand what their customers hold dear. The most common denominator used to apply this principle is money. An advertisement with the phrase ‘For a limited time only’ is a typical example.


Social proof

A person is naturally drawn to a product or service that is liked and trusted by others. This is because when people are undecided, they trust that a group of people will have more knowledge and experience than them as an individual, and tend to follow the crowd.

A ‘most popular’ section on the menu of your favourite restaurant is a typical example of this principle at work. Other common and effective examples are endorsements, reviews, and shares.

Think about it - wouldn’t you buy something on Amazon with more than 10 thousand reviews or order from a Zomato restaurant that has a 4.5* rating?


Information gap theory

Psychology says that when there is a gap in someone’s knowledge of a topic they care about, they will take action to close that gap.

Marketers use this gap between what people already know and what they want to know, to build interest. They tickle people’s curiosity by revealing little information and leave the rest to be found out, encouraging their customers to discover the facts and the details themselves.

A ‘Did you know’ headline on a blog does this. As do teaser campaigns. A partially revealed sleek-looking car fuels the inquisitive nature of customers. Such campaigns build excitement about the launch and induce customers to know more through a first-hand experience.


Appealing to the senses

Our senses such as sight, smell, and taste absorb all the information around us and convert it to electrical signals for the brain. The interpretation and organisation of this information lead to perception.

And since marketers aim to influence their customers’ perception, appealing to the senses can have a powerful effect. Marketers can change perceptions by working on how their brand is seen, heard, and experienced.

The next time you walk into a cafe, notice how the appealing smell of coffee is at work well before the menu arrives. Another common marketing tool is the use of colours, because different colours appeal to our senses in different ways. Other popular examples include the use of beautiful and attractive imagery.


Using psychology, your business can influence the way people think, act and feel about your products or services. To know how it can be applied to your business, get in touch with us today.

Reach us on Email or WhatsApp to know how we can help you grow your business.

Komal Bagga is a creative communication strategist. She manages communication design for products and organizations and has written for both businesses and nonprofits. Always curious and a keen learner, Komal’s interests are varied. They range from philanthropy and a love for nature, fitness, and storytelling.

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